Posts with tag: North East

Could the North East lose thousands of cheap rental homes?

Published On: January 19, 2017 at 10:00 am

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Categories: Property News

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It has been estimated that up to 26,000 of the North East’s cheapest rental properties could be lost by 2020. One property campaigner in particular feels that this gives more evidence that renters should be given better deals.

Figures

Official Government figures released last week indicated that the number of affordable homes available at social rent in Britain fell by 120,000 between 2012 and 2016. This was largely as a result of Right to Buy.

Forecasts from the Chartered Institute of Housing predict that this number will rise to 250,000 by 2020-which will be an overall drop of 10%.

Should these figures be replicated in the North East, it would leave 25,951 less cheaper homes in the region. By area, this would be a reduction of:

Newcastle-3485

Sunderland-3240

North Tyneside-2494

South Tyneside-2120

County Durham-4500

Northumberland-2584

Could the North East lose thousands of cheap rental homes?

Could the North East lose thousands of cheap rental homes?

Deals

Ajay Jagota, founder of sales and lettings firm KIS, said on the figures: ‘This is yet more evidence of the burning need to give renters a better deal.’[1]

‘It’s no secret that there has been a long-term shift in the UK away from social housing towards the private rented sector. The problem is that the private rented sector hasn’t necessarily evolved to meet the needs of that demand. The biggest example of that is tenancy deposits, which place a huge financial burden on some of our poorest tenants – leaving good people left priced out of good homes rented from good landlords,’ he continued.[1]

Mr Jagota feels that: ‘The easiest way to help them would be to abolish tenancy deposits and for the industry to use sophisticated insurance policies instead. Such a move could save the average renter £1400 while actually protecting property investors assets more effectively.’[1]

‘The craziest thing is that the majority of social landlords do not take deposits, and they seem to manage perfectly well without relying on an out-dated and draconian deposit system. If privately rented homes are the future, why is the privately rented sector stuck in the past?’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/thousands-of-the-north-east%E2%80%99s-cheapest-rented-homes-to-be-lost-by-2020.html

North East rents rise over £600pcm

Published On: September 7, 2016 at 9:02 am

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Categories: Property News

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New analysis has revealed that that average rents in the North East have gone above the £600 mark for the first time.

The report from sales and lettings firm KIS also shows that the typical rental yield in the area is now a record 4.6%.

Seasonal slowdown

In addition, further data from the report indicates that a summer slowdown in house prices in the North East saw values fall by an average of 2.3% per month in July and August.

This means that the average North East property is now valued at £157,438. Property values slipped in all of the twenty areas surveyed, with the exception of Whitburn.

Areas that saw the most sharp declines were Durham City, where prices fell by 4.2%, Houghton-le-Spring (3.7%) and Darlington (3.5%).

The regional fall in property prices is in conflict with a rise of 5.2% recorded at the same period last year. In 2015, prices actually increased by 3.8% in July and by 1.8% in August. In addition, the typical house price in the North East is presently 3.8% lower than in August of 2015.

Rising rents

North East rents continued to increase by around £10 pcm across the summer, reaching £610. This is the first time rents have exceeded £600 since records began. What’s more, rents have increased by 7.4% from the £565 recorded since the beginning of August.

Blyth is still the cheapest place to rent, with typical costs of £397 pcm. At the other end of the scale, Tynemouth is most expensive, with rents of £1125 per month.

The regions ‘Buy-to-Let capital’ is Peterelee, where investors can expect rental yields of 6.1%. Other strong performers are Gateshead and Killingworth (5.9%) and Sunderland (5.3%).

Falling property prices have seen the average North East rental return rise to 4.6% over the course of the summer months.

North East rents rise over £600pcm

North East rents rise over £600pcm

Strong

Ajay Jagota, founder and MD of KIS, observed, ‘the current strong performance of the North East rental market is no surprise to us here at KIS where we saw a 15% year-on-year rise in transactions in July, with August continuing that trend. There’s a hypothesis to be made that the Brexit vote has strengthened the rental sector while slowing growth in residential sales as people put off making long-term decisions like buying houses, but it’s important to remember that regional house prices are essentially unchanged since the vote, a clear sign that some of the more apocalyptic predictions have not even come close to coming true.’[1]

‘There can be no question that rising demand for properties has taken average rents above £600 a month for the first time. Obviously renters will not want to see this, but this rise is broadly in line with inflation and of course rents in our region remain close to 20% lower than the national average. From a landlords perspective there couldn’t be a better time to invest with strong rental demand and rental yields in the North East at an all-time high and property values dipping slightly following a period of consistent capital

[1] http://www.propertyreporter.co.uk/landlords/north-east-rents-go-above-600pcm-for-the-first-time.html

 

 

How do rental costs vary between North East metro stations?

Published On: May 19, 2016 at 1:45 pm

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Categories: Finance News

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Interesting analysis into the private rental sector has looked at how rents vary between North East metro stations.

Research conducted by property firm KIS reveals that rents can alter by an average of £66 from station to station. Choosing the correct location could save as much as £500 per month in rent!

Fees

Data from the investigation shows that the average cost of renting a home on the Metro Map is £560. However, there is a £545 difference between the £938 a month paid to rent in Haymarket and Monument and the £393 paid in Jarrow.

At £808, Jesmond is the most expensive place outside of central Newcastle in which to rent. This is followed by West Jesmond (£726) and Tynemouth and Gateshead (£723).

On the flip side, Jarrow (£393) is the cheapest place in the region to rent, followed by Tyne Dock (£399), Wallsend (£412) and Hadrian Road (£413).

The map also reveals the average cost of renting a two-bedroom property within a quarter of a mile of all of the Metro’s 60 stations. This shows where Tyne and Wear renters can potentially locate a bargain.

Highs and lows

Excluding central Newcastle, the top five most expensive places to rent in Tyne and Wear per calendar month are:

  • Jesmond-£808
  • West Jesmond-£726
  • Tynemouth/Gateshead-£723
  • Whitley Bay-£673
  • Cullercoats-£660

The five cheapest areas to rent are:

  • Jarrow-£393
  • Tyne Dock-£399
  • Hadrian Road-£413
  • Chichester/Byker-£423
  • Meadow Well-£425
How do rental costs vary between North East metro stations?

How do rental costs vary between North East metro stations?

Between stations, the largest differences were found to be:

  • Manors to Byker-£477
  • North Shields to Whitley Bay-£235
  • Gateshead to Central-£212
  • Gateshead to Gateshead Stadium-£148
  • Haymarket to Jesmond-£130

Location

Managing Director of KIS, Ajay Jagota, commented, ‘location, location, location is one of the classic golden rules of property, but month after month I’m stuck struck by the fact that people are prepared to pay as much as £5724 a year to live in a particular area. To put that into context Metro journey of three or four minutes-or even a bike ride of a little more than five-from Gateshead to Gateshead stadium is worth almost £2,000 a year in rent.’[1]

‘It’s not just the rents that cost, it’s deposits too,’ Jagota considered. ‘If you want and can live in the heart of Newcastle, you’re not just going to have to find the best part of £1000 every month in rent, the chance you’ll need to find £1407 just to move in.’[1]

‘Research this week suggests there are only five places in the UK were renting is cheaper than buying and none of those are anywhere near the North East. One of the major stumbling blocks to buying a home is all-too often the difficulty buyers have in saving up a deposit, and extra costs like deposits can really make a difference to people’s ability to save,’ Jagota concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/choosing-the-right-metro-stop-could-save-500-per-month-in-rent.html

North East property prices fall in April

Published On: April 29, 2016 at 10:29 am

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Categories: Property News

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A new report from KIS Housing has indicated that house prices in the North East of England fell by 4% in April.

As a result, the average property value in the region fell by £7,000.

Falls

The fall in values eradicates the 3.1% increase recorded in March, which had previously added £4,811 to typical property prices. What’s more, house prices are currently 3.6% down in 2016 to date.

Presently, the average house price in the area is £155,979. This is £7,016 less than at end the end of March. However, this is 1% higher than at the same time in 2015 and 3% greater than in 2014.

All areas saw decrease in property values during the last month. Whitley Bay and Blyth saw above average falls of 6.1% and 6% respectively.

Rises

Since KIS has begun to compile data from April 2014, South Shields has seen the largest price increase, with values increasing by 6.7%. Newcastle and Gateshead have also seen rises of 6.6% and 6.2% respectively over the same period.

In Darlington, April’s decline of 4.7% saw property prices slide to these seen in 2014. As a result, savvy investors are being told to consider purchasing in this region.

In addition, the average rent in the North East increased by £14 per calendar month to £566 in April-a rise of 2.5%.

By region, rents are nearly the same as those recorded in 2014, where an average per calendar month was £560.

North East property prices fall in April

North East property prices fall in April

Predictable

Ajay Jagota, founder and Managing Director of North-East based sales and lettings firm KIS, said, ‘house prices falling at a rate of 1% a week throughout April might sound surprising to some but the sad thing is these figures were entirely predictable. I’ve been forecasting for months that March would see prices boom as landlords raced to complete purchases ahead of tax changes which took place at the start of this month, before slumping back as many abandoned those investments altogether when they became less profitable. And so it proved.’[1]

‘The irony is that investors are now benefiting from higher rental yields and lower purchase prices. It’s the renters that lose out, as rents will inevitably rise as a consequence of those tax changes. Fewer properties are now available, leading to higher prices. It’s simple supply and demand. Having collected this data now for two years we are starting to see some fascinating trends emerging. Although average rents are all-but unchanged since April 2014, on an area-by-area basis there are some huge differences – 17.5% higher in Whitley Bay, but 21% lower in Jarrow.

The reasons for these variations could easily be something as mundane as only a few rental properties coming onto the market, or a disproportionate number of cheaper or more expensive properties skewing the figures but overall they show the real value of us collecting this data – being able to tell our clients with absolute certainly which areas of the North East are at that moment the most attractive to renters and buyers and where landlords can expect to get the best returns,’ Jagota went on to say.[1]

[1] http://www.propertyreporter.co.uk/property/april-wipes-record-%C3%A3%C2%A27k-of-north-east-house-prices.html

Is the North East the buy-to-let hub?

Published On: April 12, 2016 at 9:20 am

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Categories: Landlord News

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Interesting new statistics may have revealed where the future of buy-to-let will be most prominent.

Research from the National Landlords Association shows that the half as many landlords in the North East have decided to sell their property during the past year than those in the rest of England. But just how will this affect the area moving forwards?

Northern Rule

In comparison to those in the North East, the number of landlords looking to sell in London has quadrupled since the announcement of increased stamp duty and cuts to mortgage tax relief.

Over the same period, the total of landlords looking to offload their property in the North East rose by only 7%. This was 40% less than the national average rise of 12%.

Further figures released by ARLA indicate that demand for rental properties in the North East rose by 17% between January and February of this year.

Property values in the North are still around half as much as those in the South. The average home in the North of England costs over £150,000 less than a similar property near to London.

Is the North East the buy-to-let hub?

Is the North East the buy-to-let hub?

Attractive

Ajay Jagota, founder and Managing Director of North-East sales and lettings firm KIS, observed, ‘there’s already been speculation that the tax changes could see 500,000 rental properties sold this year, but that doesn’t mean that their owners aren’t going to buy elsewhere-and anecdotally there seems to have been a real uplift locally in enquiries from investors from outside of the region looking to invest in property in the North East.’[1]

‘There’s no question that the region will become more attractive to investors in the coming months. Not least because the North East’s lower house prices will mean that the 3% rise in Stamp Duty on additional properties introduces last week and Bank of England plans for new affordability tests and stricter borrowing limits for buy-to-let mortgage won’t be so painful in this part of the country,’ Jagota continued.[1]

Yields

Mr Jagota went on to say, ‘the return on a typical buy-to-let property in London is currently something like 5.2% compared to as much as 7% in somewhere like Gateshead. You get a similar rental yield on a property in Peterlee than you do in London, with the added attraction that you can buy almost five properties there for the price of one in the capital.’

‘We don’t offer the same capital appreciation as other regions of the UK, but it’s clear that the North East has a lot to offer property investors-and as more competition can lead to lower rents and better homes, they have a lot of offer renters too,’ he concluded.[1]

[1] http://www.propertyreporter.co.uk/landlords/could-the-north-east-become-the-uks-new-buy-to-let-capital.html